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In this episode, Joshua Sheets of Radical Personal Finance stops by. He's going to share with us some fundamental truths about how to survive the most likely disaster to impact your life. Howdy and welcome to In the Rabbit Hole's Urban Survival Podcast. This is episode number 232. I'm your host Aaron and you are in the rabbit hole safe and sound.

A quick note before we get into today's episode, the show is going to take a short two week break. Again, the show is going to take a short two week break and then we'll be right back. Now, on to this episode. Joshua, welcome to In the Rabbit Hole. Thank you for having me.

This is going to be fun because you are a topic, or not you, but what you do is a topic we don't get to discuss often enough around here in the rabbit hole. And you are, of course, the host of the Radical Personal Finance Podcast, which I've now become addicted to thanks to a regular guest that we have on the show who also requested that you be on the show.

And I was excited because I was like, ah, finance show, it's going to be boring. And in the first episode I turned on, there's you're riding a 50 Cal or you're riding a 50 Cal. That'd be weird. You're riding a motorcycle and shooting a 50 Cal and there's zombies.

And I was like, wow, all right, I think I think I like this guy. So that was a listener called in and said, I have a Harley I haven't used in in three years. And what should I get rid of the thing? And he was going to just take it and and buy some kind of, you know, some random mutual fund.

And I said, that sounds utterly boring. Why would you trade a Harley in for a mutual fund? Why don't you go and do something fun? And one of the suggestions I said, go buy a Barrett 50 Cal. It'll probably retain its value a little bit better. You'll probably have fun shooting it.

If nothing else, then may come in handy in the zombie apocalypse. You never know. Exactly. Exactly. At the very least, it'll clear your sinuses out every time you shoot. Yeah, exactly. Give you a, give you a shoulder massage. Yes. Very gentle massage. So for folks who aren't familiar with you, who are you and why do you know so much about personal finance?

Well, I went through an interesting journey when I was younger. I was always interested in just getting rich and that was what I wanted to do. I wanted to get rich. And so my preferred section in the bookstore was the personal finance section. So I made the journey through the world of what I call mainstream personal finance advice.

Then when I was 23, I decided to go into the professional financial industry. And so I became a professional financial advisor and I worked hard, studied hard to become knowledgeable in the area of personal finance. I became a certified financial planner, chartered life underwriter, chartered financial consultant, got another half dozen industry designations and credentials, wound up getting a master's degree in financial planning.

And I got sick and tired of over time there not being a bridge between what I call the world of personal finance and the world of professional financial advice. And I didn't, I had trouble finding good financial media. And I said, hey, we're in the world of the internet.

Why don't I go and take it a shot and give it a shot? So I closed my financial planning practice and I launched radical personal finance with a goal of transitioning those worlds and trying to bring competent academic integrity, which comes from the world of professional financial advice to the world of personal finance and give people practical advice that would solve some of their problems.

Because what I realized is the mainstream professional financial industry isn't very good at helping people get rich. They can't solve the, we, I shouldn't say they, we can't effectively solve many of the practical issues that people face. So we as an industry are very good at serving people who are already rich, but we're not very good at helping people become rich.

And so I felt there was a place for crossing over and trying to help people who are already rich, but also help people become rich by giving practical financial advice that's buttressed by good financial academic integrity. Oh, wow. That's pretty neat. And, you know, you've mentioned something there and I think there was an undertone that I also picked up in your bio on your website, which talked about you.

You ended up with a bit of a negative opinion of the industry, the financial services industry. So was that where that negative opinion stemmed from or was there something else? What drove that? I wouldn't use the word negative. I had a negative opinion before I went into the industry.

And, you know, I used to say brokers are out to make you broker insurance is a scam and a waste of money. And I don't have that. I think the industry is flawed in many ways. But on the whole, just like most industries, the majority of the coworkers that I had, the majority of the people that I interacted with, they cared about their clients and they worked to try to do the best thing given the tools that they were there.

So I'm not a crusader against the financial industry. I would like to see many things improved, but that's not. I'm not trying to just talk about all the problems. There are just some fundamental disconnects. And I guess it would best be summed up in the fact of what I said.

The mainstream world of professional financial advice is very good at helping people who are rich. It's not very good at helping people become rich. And there are some kind of fundamental reasons why. But it's important that we draw from the mainstream financial industry, but it's also important that we draw from the wisdom and advice of our parents and our grandparents and the people that we know who are close to us who walked that journey from poverty to wealth.

You mentioned some fundamental reasons. What would those be? Well, I would say number one, poor people don't generally want to pay for advice. And it's remarkable how frequently rich people will pay for advice and poor people won't. When I got in the industry, I was 23 years old, had a total baby face and a major inferiority complex.

And I thought at that time, I thought, you know what, it's going to be easy for me to sit down with poor people. And I'm using I guess I should use the word broke people because people talk about kind of poor as a poverty as a class. So I just talk about broke people.

So I thought it would be easy to sit down with broke people because broke people will want my advice because at least I'm not broke. At least I can help them get unbroke. And I thought it would be hard to sit down with rich people because I said rich people will probably look at me and say, this guy's 23 years old.

He doesn't know anything. What I found was the exact opposite. The people who are the easiest to get meetings with were people who are already wealthy. Now, they might only give me 10 minutes and they would want to get straight to the point, say what you got. But they were always open to hear a new idea, see if I had a new product that would be helpful for them or a new idea, maybe a tax idea or an investment idea.

And it was relatively easy to get appointments with wealthy people if I could demonstrate value. On the flip side, broke people almost never wanted to sit down with me. Broke people would keep their finances very close to their vest. They would tell lies and they wouldn't talk to me about what they actually had, where it wouldn't be uncommon for a wealthy person to sit down and lay out their whole financial situation for me.

And that really surprised me. And frankly, I had one experience that is deeply engraved upon my psyche. In all my years of financial advice, I spent six years in the professional world of financial advice, probably met face to face with over a thousand people. In all my years, I only had one person actually ask me proactively to sit down for an appointment.

When you work as a financial advisor, you're used to reaching out to people and say, hey, can I sit down with you and talk to you about what I do, et cetera. It's a very kind of outward focused approach. But one day I went to a networking event, a club here on Palm Beach Island where they would bring in various famous speakers every month and have kind of a lunch club.

And I got an invitation. I thought this is great prospecting territory. Sat down with some guy I didn't know at a lunch table and he asked me what I did. And I told him I was a financial advisor. He said, oh, great. I'd love to have you take a look at my stuff sometime.

And I was just shocked because no one ever said that I'd love to have you take a look at my stuff. So we made an appointment. He came into my office later that week. And as he sat down in my office, he laid down a piece of paper on the desk and said, here's what I've got.

Here's what where it is. Here's what my goals are. Here's what I'm working towards. Take a look. I'd love to hear your feedback and your advice. Aaron, in all my years as financial advisor. This was about the only financial plan that I couldn't poke holes in. I became very good at coming in and at least finding one or two or usually half a dozen or a few dozen areas at which I could give somebody some practical recommendations to improve their plan.

Not this guy. He was one of those who was truly squared away and it was based upon his proactive approach. To getting advice and I'm convinced that he'd done it throughout his life. He had all we often sought advice from professional advisors and his plan was squared away. I gave him one minor suggestion as something to consider and that was it.

So that's really it. It's it's seeking help. You know, my father, when I was young, I would, I would pick up a book or and I would book was terrible. And he said, well, did you learn one thing from it? I would say, yeah, sure. I want, you know, there's one little thing.

He said, then it was worth the price of the book. It took you a while to get there. Yeah. It would have been nice if the book was written better, but it was worth the price of the book if you got that one thing. So that's that that's an interesting distinction there.

I'm often amazed at how willing people are to spend tens of thousands of dollars on a college degree because somebody told him it was a good idea and how unwilling people are to spend 30 or 50 or $300 on actually practical advice that will help them in their business.

The other day I was with a friend and we were talking about info products, and if I find something that potentially has an answer to a question that I have, I'll pay 30, 50, 500 bucks. It doesn't matter because that might be the answer that I need for a particular situation.

And I'm not saying that in a cavalier way, such as, well, I have all kinds of money and therefore I can just pay 30, 50, $500 and it not matter. That's not it at all. But I've learned that if I will continually seek out good and accurate information, I'll save myself time, which is the most important thing and money in the long run.

And I'll gain far more than I paid for the price of admission. I am right there with you. I've in my in my day job. It's not uncommon for me to pay $2,000, $2,500 for an info product to pick up one new tip or something that if it's a really good tip, it can level up my career.

It can really help me do more for a client. So I totally understand what you're talking about there. Yeah, I look at it in the world of survivalism. If somebody went to in the rabbit hole and they just signed up with, I forget your subscription fee, very small subscription fee for your community, and they started to get the articles and the the materials that you've prepared to guide them, your seven day course and other materials that you have.

How much more progress would they make in their path to personal preparedness versus trying to figure it all out for themselves with endless YouTube videos? Yeah, it would save them so much time and money. Yeah. By the way, you can pay me my commission later. Exactly. I was going to be like, dude, I owe you some money after we get off.

Um, so that was worth the consulting fee right there. Uh, but a lot of people, as far as practical advice goes, let's let's start with some practical. It's it's stuff. And I'm going to ask a very high level question and you can take this as deep as you'd like.

It is something that I hear people run into quite often, and I do understand how easy it is to get tangled in this, and that is credit card debt. So what do you consistently find is the best strategy and subsequent tactics for people to get out of credit card debt?

First thing you have to do when you're looking at a situation of somebody who's deeply in debt or moderately in debt is you need to look to accurately identify the cause of the debt. Not all debt was caused by the same circumstances, and therefore the solution will vary depending upon the cause.

So let's use three examples. Scenario one, my wife is diagnosed with cancer. I pull back from work. I work commission based job. I pull back from work. My income goes down. I'm spending most of my time caring for her. We have significant medical bills and I start using credit cards to make up the difference.

I'm deeply in debt now on the other side of the cancer treatment, and I have to figure out what do I do. That's scenario one. Scenario two would be I have an addiction to spending. So whether that addiction to spending is new fancy athletic shoes to perfectly complement my wardrobe or AR-15 lowers, I have an addiction to spending.

And so I just consistently am buying every new doodad and gadget probably in your world. I'm the biggest tactical guy at the local gun range. But I have a whole bunch of stuff, but I can't shoot. I can't do anything with it. But I've spent thousands of dollars and it's all on my credit cards.

And then situation number three would be perhaps somebody who launched a business or who has worked to establish a new business. And in order to finance it, they've put tens of thousands of dollars on credit card debt. So each of those three things has a very different possible cause.

And there's a different lifestyle decision that can affect them. And so therefore there would be a different plan. In the first case, the person with the sickness, I think it would be important to acknowledge that when you're facing something so massive in terms of its life impact, to pursue the plan or the actions that I just described is a very reasonable thing.

And so in that situation, you don't jump up and down on somebody and say, how could you be so stupid and spend all kinds of money? They're putting groceries and the power bill on their credit card. So the get out of debt plan there is going to involve a new budget.

We're going to see are the medical situation stabilized. You can't do anything until things are stabilized, but when they're stabilized, what can we do from an income perspective? What can we do from a lifestyle perspective and how can we get this debt paid off? Thing number two, the guy needs a slap upside the head because that chronic overspending is just due to no pre-planning, no thoughtfulness, and that'll land them in bankruptcy court.

And I'm sorry, but a hyperinflationary period isn't going to help him wipe out that credit card debt because he's got more guns to fight the zombies. It doesn't work. And so that person needs a slap upside the head and to be put on a very strict budget, probably need to sell half the junk that's in the back of the closet and go to work.

But thing number three, in terms of how somebody who's in business would work their way out, they may never be able to work their way out with just putting an extra couple hundred dollars per month on the credit card debt. That person in the business scenario may need to wait a year or two years while they establish the business.

And then all of a sudden the income will come in and there's an extra six figures of profit that they can then turn around and use and apply towards a credit card debt. So step number one is to accurately analyze the reason and the cause of the debt so we can identify this fundamental solution.

Once that's done, then you can go and start to implement a practical plan. So it's important to prioritize debt on a couple different factors. Number one, you should prioritize debt and based upon its potential danger, for example, secured debt versus unsecured debt. Whenever possible, I'm going to pay off secured debt instead of unsecured debt in order to protect myself from the possibility of having an asset taken away from me.

So that's one consideration. Another thing would be things like interest rates. Interest rates matter. And so we need to look carefully at interest rates, look carefully and do an analysis of where to start. And then we want to figure out what's going to be the best debt plan. Usually the best debt plan for most people is going to be to pursue what's called the debt snowball, where you pay off the smallest balance debt, then you move on to the next one that gets you the most emotional energy.

And as long as you're paying off debt quickly, it'll all shake out in the long run. But the plans need to be customized based upon the actual circumstances that caused the debt in the first place. Do you find the hardest part for most people is getting that initial inertia going?

I think the hardest part for most people is just getting pissed off at the situation. If somebody doesn't have any emotional energy, they're not going to do anything. Most people have a different comfort level with debt and frankly, comfort level with anything. One of the concepts that I think is very valuable is to recognize that many people have a financial thermostat, a set point at which they're comfortable.

The best example of this, T. Harv Eker, I think, was the one who first popularized it, a popular personal financial seminar guru type of person. He wrote a book called The Millionaire Mind, and I think he was one of the major popularizers of this concept. But he talked about the fact that we all have a financial thermostat.

So most of us have a comfort level with how much money we keep in our bank account. For some people, it's $1,000. For some people, it's $10,000. For some people, it's negative. And as long as I don't have more than two or three bounce transactions a month, that's okay.

And some people, it's six figures. But the best example would be this. If Donald Trump woke up one day and looked down at his financial statements and realized that he was worth $1 million, think about that. He's worth $1 million. Do you think he would rejoice over the fact that he's a millionaire?

Probably not under his current financial circumstances. He would freak out. Yeah. Right? And he would say, "Are you kidding me?" And he would immediately blow a hole in the side of the office, and he would go out and figure out, "What deals am I going to do? How am I going to make things different?" And he would start doing things left and right and figuring out how to get from a million back to a billion.

Right. That's what he did in years past. Right. His level of comfort with his financial status, his thermostat is set in the billions, not in the millions. Now, on the flip side, if you find somebody who is broke and who's not comfortable having money around, you could put a million-dollar inheritance or a million-dollar lottery winning into their financial accounts.

They would look down and they would say, "I've got a million dollars," and they would freak out. And within a couple of years, it would all be gone. That's proven again and again and again. We all know people who have gone through that, whether it's an inheritance or a lottery winnings, because people didn't develop the comfort level with it.

And so the financial process has to be built with a comfort level, and you have to regularly adjust what you're comfortable with. And that's going to grow on the wealth side, and it has equal applicability to the debt side. So it's only when somebody looks down and says, "Are you kidding me?

I've got $20,000 on my credit card because I got freaked out during the election of 2016, and I went and bought a bunch of stuff I didn't need. And then gun prices dropped, and here I am holding a safe full of stuff that I can't sell for half of what I sold before, and now I got this credit card debt.

That was stupid, and I'm pissed off, and I'm going to get this paid off." And it's only when that happens that they actually make progress in their financial situation. I got you. We'll be back after this quick break. Listener, do you get at least $3 a month worth of value out of ITRH?

You should see what we do for the Roving Horde Armada members. Check it out today by visiting ITRH.net. Members get access to episodes a day early, access to monthly virtual and in-person meetups in some areas, an invitation to the secret ITRH Armada Facebook group so you can chat about survival all day long with like-minded people, access to every episode ever produced by ITRH.

That's right, all the way back to the beginning, including the one that was never aired. And those are just a few things you get with your membership when you sign up and become part of the ITRH Roving Horde by going to ITRH.net. Again, that's ITRH.net. So once somebody's gotten past that point, or if they're not even at that point, and they just say they have been on autopilot, we'll say that maybe they've got a 401k or something like that, but they finally say, you know what, I need to sit down and become more aware of what's going on with my finance.

I'd like to really focus on it and give it some attention and maybe really make it start growing faster. And they say, you know, Joshua, I want to build a financially resilient life, and that includes an emergency fund. I realize this is a very vague kind of thing I'm throwing at you, but where would you begin with something like that?

Number one, get clear goals. Most people don't have any idea of what they're working towards. For years, I would, and I recommend starting with this, I'll give the question and then I'll tell the backstory. For years, the first question I asked every single one of my financial planning clients, and the question that I now ask every one of our listeners is this.

Pretend for a moment that we're sitting down three years from today, whatever three years from today actually is. Now, if we were looking back over the last three years to our initial conversation today, what has to have happened personally, professionally, and financially for you to really feel satisfied with your progress?

Ask that question hundreds of times, and I encourage you, do it as a journaling activity. Sit down and just ask yourself that simple question. What has to have happened personally, professionally, and financially for me to really feel satisfied with my progress over the last three years? Now, what I learned in that process is most people could list out one or two short-term goals, things they were excited about, such as, "We're going to take a vacation this year." But when I really dug in to details of a longer-term vision, very few people could fill in those details.

Another question I would ask when talking about retirement would be this question, "Is there a point in a time at which you would like to work because you want to, not because you have to?" And of course, we would always laugh together about that because the first answer is always, "Well, of course, today or yesterday," or some variation on that.

I would say, "No, seriously." My guess, unscientific guess, my guess is about 75 to 80 percent of my respondents would say yes, and the age at which they would choose was 60 or 65. Now, I ask you this question, "Is there anything magical that happens at 60 or 65 that's going to cause somebody to want to, at that specific age, work because they have to, not because they want to?" Yeah, I can't think of a reason.

I guess this is just programmed into us from Social Security. Exactly. Now, the reality is you can become financially independent in a few years. The tagline of my show is that I work to help people live a rich and meaningful life now and build a plan for financial freedom in 10 years or less.

So you can do it in 10 years. Some people can do it in fewer than 10 years. Or you can do it in 60 years. But most people have never thought about it, and so they've not developed meaningful goals. And so the first thing to do is to develop meaningful goals, things that are important to you, not because the Social Security Administration decided years ago that the age 65 was going to be the full retirement age for people born between 1942 and 1953.

That's a pointless goal. But rather, my goal is, by the age of X, I'm going to be financially free. And this is what financial freedom looks like. Once that starts to get filled in, then we can map out and develop a really appropriate plan in that direction. So how do I ask this?

Do you find that it ends up meaning finding ways of increasing personal revenue, or is it sort of around the opposite, where it's let's reduce a financial footprint in ways that aren't extremely painful and then put those into some sort of vehicle? Both are important, but I think it first should start with lifestyle.

Expenses and income both need to be carefully analyzed, but many times the first thing that needs to be looked at is lifestyle. Let me just give a very simple example. I'm convinced that the fundamentally most important decision you can make, which will affect your most important decisions you can make, which will affect your satisfaction with your life circumstances, are your suitability to the work that you engage in and the location where you live.

If you talk to people and you recognize that, with the exception of possibly sleep, most people, most of us will spend far more time at work than any other activity in our life. One of the most meaningful things you can do to improve your satisfaction in life is to make sure that the work that you've chosen to do is very suitable for you.

It's a good fit for you. So I recommend in retirement planning, for example, don't start with saying, "What would I do if I could retire?" Although that is a useful question. Good journaling question. "What would I do if great aunt Sally died and left me $10 million tax-free? What would I do in that circumstance?" Very valuable.

But I also recommend, starting with this question, "What would I do if I knew I could never retire? What would I actually do if I knew I could never retire?" And if you answer that question, you'll probably get a lot closer. Because when I was a financial advisor, I noticed this.

Many of my clients who had the most money, who could easily afford to retire without any financial insecurity at all, most of them didn't ever actually retire. Or if they did, it was only for a short period of time. They continued to do the work that they were doing because it was meaningful to them.

Now, on the flip side, many of the people that I met with who were the most anxious to retire would never have the money to retire because they just didn't have any money. And they were anxious to retire. And I observed that and I said, "We're doing this thing wrong." You know, the whole concept of retirement is basically a lie.

It was a political scam. I don't know how—you want to wear tinfoil hats here? Oh, no, I love tinfoil hats. Please, strap them on. So there are two things that you should know with the history of retirement. Now, it is not all this way today. But there are two things that you should know.

First of all, if you trace the history of retirement, the whole concept of retirement primarily began during the reign of Chancellor Otto Bismarck in Germany. And depending on how you look at the facts, he was one of the first ones who started and promoted the idea of a state-based pension system.

We're going to pay people a certain amount of income over a certain age. And he did it as a way of dealing with his political enemies. Now, there are two aspects to this. Number one, he was being attacked by the socialists and politically attacked by the socialists. And they were gaining ground.

And so one of his answers was, "Well, I'll out-socialize the socialists." And he came up with this scheme of, "Well, if I start offering retirement benefits for all people over a certain age, then I'll be perceived as this great and mighty ruler who is helping the people." And of course, any time the government can give money from some people and turn around and give it to other people, then that's a good way of buying votes.

Nothing has changed in the last century. So that was one of his brilliant ideas. Now, this one is harder for me to confirm. And I've not gone to Germany and pursued official documents. But I've heard people say the other net benefit of his decision was that he actually was able to remove many of his political opponents from office because, shockingly, many of his most influential political opponents were over the age of retirement.

And if you think about this today, if we were to go in and even into—I don't know what the current breakdown is on age of the U.S. Senate or the U.S. House of Representatives. But if we were to go in and just wipe out everybody that's above age 62 or 65, many of the most influential people would be immediately set on the sidelines.

Because over time, capital accumulates, it compounds. And now it does it with financial capital, but it also does it with political capital and intellectual capital, etc. So that was Bismarck. Now, that concept became popular in various political circles, primarily in socialism. In the United States, it came into force during the Great Depression.

So prior to the Great Depression, if you were to go to a 65-year-old man and say, "Hey, guess what, Joe? You can retire." He would look at you and say, "Are you kidding me? Why would I want to retire? This is my work. This is important. This is meaningful." But during the Great Depression, many of the politicians were convinced that there had been a fundamental transformation of the economy.

They didn't think it was going to be a short-term recession-depression. They thought that there was a fundamental transformation, and the unemployment rate was very, very high. Well, there are a couple ways that you can get the unemployment rate down. Because remember, it's a ratio of employed to total population.

You can get it down by building the economy. You can get it down by having more jobs. More jobs and more people employed will lower the unemployment rate. But you can also get it down by removing people, workers, from the denominator of the fraction by saying, "Well, let's just get people out." And so that's what they did.

They started to come up with pension systems and to market them so that older workers would get out of the workforce and make a place for younger workers. A good book I'd recommend. There's a book called The History of Retirement. That's the most academic that I've read on the subject where the research is sound and the academic narrative is strong.

But it goes through and traces how, in the early years, during the early 1920s, 1930s, 1940s, retirement was viewed as a curse. Whereas over time, through a period of sustained marketing, the whole buy a condo in Florida and be happy on the beach, it's now become seen as a blessing and as a mandate, something that all of us are entitled to.

It's become an entitlement. That's the history of retirement. So I look at it much more and I say, "Hey, listen, if Conrad Hilton or if Donald Trump or if George Soros or Bill Gates or Warren Buffett, whatever big name rich person you want to put in it, these guys and gals don't want to retire, then why should I?" That's really true, especially when you start talking about people that love what they do.

I know I was a little over a year ago, I was sitting down to dinner with the chairman of a board of a Fortune 50, a very proper British gentleman. And it was the only F-bomb he dropped all night long. At that point, he was being forced out. I said, "Well, so what are you going to do with your retirement?

Here I am. I'm thinking this man is loaded to the gills, has more money than I would know what to do with." I said, "Well, what are you going to do?" And he just looked at me and he said, "Well, I guess I'm just going to F and die." And it was like, "Okay, all right." I mean, that was a lot of his meaning.

I'm sure his grandchildren and everything else were wonderful, but that was where he got his purpose and his meaning. It's true. So if you actually dig into the academic literature on the subject, some of the studies and whatnot, number one, people who retire from work often find themselves facing significant emotional problems, including severe depression.

There are also significant physical problems that can kind of accompany it as well. I would guess that probably all of us, anecdotally at least, know one or two people who retired and then two or three years later, they died just all of a sudden. My grandfather, one of my grandfathers, one of them was a farmer, and so farmers don't ever retire.

They just slow down a little bit. And so thankfully, he didn't retire. He lived till he was 93 and he had a heart issue or whatever and died. But the other one was a schoolteacher. And over time, he taught at the college level, and then when he got older, he stopped being a full-time professor and he worked as a tutor.

So up until his mid-80s, he would go down every day to the local community college where he would work to tutor his students in mathematics and chemistry. And at 85, 86 years old, my grandfather was a young man. You could tell, of course, with the white hair and the wrinkles that he was older, but he didn't present himself as an old man.

But finally, it became unsafe for him to drive. He had a minor accident, and so we encouraged him to stop driving. He came home, he sat down, and in a couple of years, he got old. He got old, he got dementia. He didn't die right away. He died at 95, but still, he got old when he quit working.

I've seen it again and again. So interestingly, if you follow kind of the AARP, the AARP has this whole new program where they're trying to help retirees solve this problem. And their whole idea is, "Hey, you can get retired, but let's go ahead and get you excited about something new to try to help you make this transition." It also is important because most people will never have the money to retire.

And so this idea of being able to live off of a pension is an antiquated idea, and most people will not achieve it. So they need to have good career plans in place. So only successful retirements I have ever seen, is what I used to tell clients, is you can't retire from something.

Somebody just says, "I hate my work. I'm just going to quit and retire." It's not going to work. You have to be retiring to something. And here I would bring in the example, just to use well-known examples, somebody like Bill Gates. Bill Gates didn't retire from Microsoft. He retired to the Bill and Melinda Gates Foundation.

And by all accounts, he and Melinda Gates are very active and involved in their work, and they're very engaged in their work. And so for him, he didn't lose that meaning. He didn't lose that sense of purpose that he had with Microsoft. He transformed that meaning and that purpose into a different outlet.

And that's the way to retire successfully, is to say, "I'm giving up this one thing. It may even be the paid source of income. I'm giving up this job so that I can pursue these other things that are important to me." That's how you build a successful retirement. So, you know, and you've touched on this a few times, and I'd like to take us there, which is somebody that just says flat out they hate their job, but they're stuck with the golden handcuffs.

They feel like they're close enough to the finish line. "Ah, I'll stick it out another 10, 20 years, even though I am absolutely freaking miserable." Where do you even begin to kind of guide somebody with that? I'll make an inflammatory statement and a radical statement in just a moment, but I want to temper that with it is important to be realistic and careful.

So let's use an example. Let's say that somebody is 19 years into military service, and they vest into their pension at year 20, and they get just really fed up with military service, and they're sick and tired of the fact that their every movement is controlled by the man.

I would not recommend to that person that they just freak out and run in and do something to get themselves discharged from the military. That would be foolish. Yeah. There's a point in time at which you say, "If I continue in these circumstances, this is a big payout." And so that may be the vesting in a pension.

That may be the ability to accomplish an important financial goal. If I stay with this job for another year or two years, I'll have the income to be able to pay off my student loan debt or my credit card debt and be debt-free or have these debts paid off.

So we need to be practical. But here's what I really believe. If you hate your job, quit. If you hate where you live, leave. Almost nobody is actually stuck. I can design almost any financial plan to help anybody get from where they are to where they want to be.

But the point is that you're going to get far more success if you are able to make that transition. And you're going to have more energy if you move. There are jobs everywhere. If you want to go live in the Florida Keys, go live in the Florida Keys. They can get a job down there.

If they want to live in the Rocky Mountains, go live in the Rocky Mountains. Let me read you just one simple example from a listener emailed me this week. Please. The full shared on my Twitter feed. Somebody go to twitter.com/joshua sheets spelled s h e a t s. And you can read the whole email.

But this is a listener of mine. And he said, I've been a listener for several years. I'm 35 years old. He said, I want to tell you what I've done over the last couple years because of radical personal finance. He said this, I quit my federal government job after more than 10 years of service and I pursued my passion in finance.

I finished an MBA program, got some securities and insurance licenses and became a by side analyst supporting a wealth advisory firm. This job is infinitely more enjoyable. It pays far less, but I am happier. And as a result, my wife and child are happier. Two, we moved from the high cost of living area outside Washington, D.C.

To one of the best bang for the buck cost of living areas in the U.S. Lancaster, Pennsylvania. Lancaster is known for this. While wages are not nearly as high, the cost of living is so low that people actually have more disposable income, more take home pay as a ratio of wages to living expenses than in most places in the country.

Despite the career change and making less money, we have maintained the same savings rates as before. And he goes on, says that they purchased a house, but then realized that they weren't. There wasn't any reason for that. They moved into a rental situation and they're saving more. And by renting now, they'd be able to pay cash for a house later.

So there. So if you want to go go now, here's practically how you do it. The first thing you always want to do is analyze income and understand what your income is. And there are a few ways to adjust income. So I want to give you the three laws that will help you to adjust income.

The only way to adjust your income is to adjust your productivity. Unless you work in a government job where your pay is based upon your being there and your seniority, not a based upon your productivity. If you work in the private sector, the only way to increase your income is to increase your productivity.

And so there are three ways that you can increase your income. Number one, you can work more hours. And this is the shortest path to making more income. So if you need to make more income, work more hours. This is if somebody is working 40 hours a week and they're paid $10 an hour, that's $400 a week.

If they move to $60 a week, 60 hours a week, they are going to make $600 a week. That's a 50% increase in pay due to a 50% increase in hours worked. That's the most direct path to more money, especially if someone is paid hourly. But that's the least sustainable over the long term.

And that's the least leverageable. You can go to 60 hours. You may go to 70, but you can't work 120 hours a week on a sustainable basis. It's just not physically possible. And there's a, there's a limit to how much you can do. So that's the fastest effect, but it's the least scalable.

So the second thing that you look at is increasing your productivity per hour. All things being equal, more productivity per hour equals more productivity total equals in time, more income. And so you want to create more work per hour. This is the one that takes a little bit longer.

It's kind of the middle one. It takes a little bit longer to put into force, but it's also much more scalable. You can make more progress by learning how to be faster and more effective at your job than just by working more hours. The third thing that controls how much money you make is how much value your work has, how valuable your work is.

And this is the one that's the most leverageable. You can make the biggest difference over the longterm, but it's the one that takes the longest to implement. So you can go from $10 an hour of income to a thousand dollars an hour of income. But it's going to take you a lot of learning, a lot of practice and a lot of productivity in order for you to be worth a thousand dollars an hour.

But that's utterly scalable. There are lots of people that make a thousand dollars an hour. Just takes a long time to get there. So those are the ways that you increase your income. So you should analyze income for most people to your question of expenses. Most people are going to make their fastest cuts by expenses.

Most of us keep some fat in our budgets, whether it's intentional or unintentional. And so what I recommend to people is they do a complete analysis of their expenses very, very carefully. And you got to start in the places that most people don't start. Most people start with writing down their rent, writing down their car payment, things like that.

What I encourage people to do is take all of their income and figure out all of their expenses, especially the expenses that come out before they get their paycheck. So write down what your taxes are. You need to write out your employment taxes. That's your FICA and your FUTA, your Medicare and your Social Security taxes.

Write out your employment taxes. Number two, write out your income taxes and figure out how much money you're paying in income tax and where you're paying it to. Is it the federal government? Is it your state? Is it your local city? So write out your taxes and then figure out how much is being deducted from your paycheck.

If you are an employee in terms of group benefits, things that you're paying for, write those things down. Then do a complete analysis of all of your expenses after you get your paycheck and then look at them. And there's two ways you can do it. What I recommend is start with the biggest ones first.

So instead of saying, "How can I cut, you know, once a month we order pizza on Friday night and it costs us $20 to get two pizzas for our family to have movie night," that's fine. But you know what? Your family likes movie night and your wife probably appreciates the break from cooking.

So instead of looking first at how can we cut $20, let's look first at some of the big ones. And so for most people, the biggest budget categories are going to be tax, housing, transportation. Start with tax. Look at your tax situation and see, "Is there something that I can do?" Now this type of analysis is outside of most people's comfort zone, but it's very important to do.

So a couple of thoughts. Number one, federal taxation is based upon income. And what many people don't realize is there are many things that affect income. I had a listener of mine who wrote to me, one of my favorite emails, who wrote to me and gave me the story on his.

He said, "Joshua, based on what you taught me on radical personal finance, I did an analysis of my situation." He said, "Today is my wife's last day at work." And what he found out was that between the, if his wife stayed home from work, based upon having a lower income, thus being subject to a lower tax rate, because in the US federal tax system, the more money you make, the higher the tax rate you pay.

So you'd be a lower tax rate. He would also qualify for certain benefits such as income-based repayment on his student loans. His student loan payment would go down because his income would go down substantially. He would qualify for a few additional federal tax credits that he didn't previously qualify for.

And then they would save some of the expenses of working, save his daycare bills, et cetera, for his wife. He said, "I found $40,000 per year of savings from my wife not working." Wow. It's hard to justify somebody going to a job they don't like when you can save $40,000 a year for them staying home.

And more importantly, from an aspect of kind of lifestyle happiness, he said, "What we're so excited about is now, instead of us both getting up, being super stressed and hurried to both get out of the house, sit through rush hour traffic, be miserable, go get the kids dropped off, et cetera." He says, "Now she's going to be home with the kids.

They can get up at a reasonable time, have a peaceful, quiet morning together." He said, "I can now switch and go into work early, skipping rush hour traffic. I'll go into work at about five or six in the morning. I'll get off at three in the afternoon, be able to skip rush hour traffic and have more time during the day with my children instead of this stressed existence." Well, all of that came by doing the analysis on taxes, tax savings, tax credits, employer-based options as well.

And all of it came from that type of analysis. There's a huge world, and this is where when I talked earlier about marrying the academic integrity of the world of financial advice with practical output. Most people don't have a clue how their tax code works. They don't have a clue what their taxes are.

I asked thousands, not thousands, excuse me, I'm getting carried away. I asked dozens of people when I was a financial advisor, I said, "How much did you pay last year in taxes?" And almost universally, the answer was, "Oh, I got $1,000 back," or "I got $5,000 back." And I said, "No, how much did you actually pay last year in your federal income taxes?" And I had to show people how to read your 1040 and how to know what line on your 1040 actually shows you that.

If I could make one change in the IRS, in the law in the United States, one of the ones that I would do would just be to simply remove auto deduction of taxes and just cause people to have to write that check at the end of the year. That would affect politics like nothing else.

Yeah, yeah, it's cleverly hidden for a good reason. By the way, for those who don't know, it's line 63. That's the total tax that you paid last year. Go look at your line 1040 and look at line 63 on your IRS form 1040. You know, and that segues us into my next question, and in it perfectly, which is someone wants to become financially literate and understands that they need to take the steps themselves to do this.

And, you know, they go out and of course they subscribe to your show, Radical Personal Finance. And beyond that, what do they start doing? The basics are simple. Most of the time, people are not poor from lack of knowledge, but from lack of behavior. There is a lack of knowledge.

We're not generally taught much about finances or financial management. It's remarkable to me that we take years of classes in high school and no one teaches us how our IRS 1040 works. You'd think that in a government school, which is supported by an IRS 1040, there would be a reason to teach people how to fill out a form 1040.

But unfortunately, that's not the case. So I don't have a great answer to that. I have things that I would love to teach people. I'm trying to come up with world-class educational materials myself. It has been far harder than I thought it would be. What I recommend to people is that they start with trying to solve one problem.

And so I'll give you kind of the framework for everything I do. I can boil all financial advice down into my, I should patent this or whatever, cop trade market, but 10 words, five points. And this is kind of how I pursue financial planning and organize all information. Basically, it falls under these things.

Thing number one, you can increase income. All else being equal, the higher your income, the better. So you can increase income. Thing number two, decrease expenses. All else being equal, the lower the expenses, the better. Thing three, invest wisely. All else being equal, the more effectively and efficiently you can invest, the better.

Now those three things, I view them as a triangle. And the ratio of your income to your expenses and the returns that you get on your investments will determine more than anything else, how wealthy you become. So you can start there. You can look and you can ask yourself a question.

How, what can I do to increase my income? Most of the time, most of us know some things we can do to increase our income. So just pick one and do it. Or how can I decrease my expenses or how can I invest wisely? So those three are a triangle.

Number four is avoid catastrophe. And this is, I view this as almost a kind of a disaster lens. And we look at our financial situation and we say, what is a catastrophe or a problem that could happen to me? And how can I avoid it? These vary. Now in the world of prepping, which your show is primarily part of, we tend to think about things like natural disaster.

But the biggest catastrophe that you're going to face is most likely a personal health situation, heart disease, heart attack, cancer, something like that. And so you got to look at that and say, well, how could I avoid catastrophe if I wind up with a heart attack? How can I avoid catastrophe if I wind up in a car accident?

And so that's where there are appropriate mechanisms of sometimes insurance policies and sometimes physical preparation. One of the things that annoys me about the world of financial advice is that financial advisors tend to only focus on financial products that can actually pay them an income for the sale. And so it's easy for a financial advisor to say, let's talk about your car insurance and making sure that you're properly insured.

But a financial advisor is not likely to talk about the importance of making sure that you have quality tires on your car. Quality tires is probably more important than insurance. They both go together. One of the things that annoys me about the world of prepping is the world of prepping has a tendency to focus exclusively on physical preparedness, physical preparation items, and to ignore things like financial instruments.

So, for example, it's much more it's much more important, I think, it's very important for you to make sure that you have plenty of food in your pantry. But it's also very important to make sure that you have disability income insurance, because the chances of your needing to have a 10 year supply of food is very low.

Right. But the chances of you becoming disabled is very high. And so that's where you put on the avoid catastrophe. So if you want to do something, you look at your situation, you say, what's something that I could do that would make a meaningful difference to help me solve a problem and to help me actually fix something, fix a danger that's not protected.

And then the final thing of the five is to optimize lifestyle. The way I put it is this. There are jobs that will pay you $60,000 a year in Chicago, Illinois. There are jobs that will pay you $60,000 a year in Coeur d'Alene, Idaho. There are jobs that will pay you $60,000 a year in Honolulu, Hawaii.

All else being equal, your financial plan is going to be identical given your $60,000 per year. But your lifestyle will be very different based upon whether you're living in Chicago, Coeur d'Alene or Honolulu. So pick whichever one of those things is going to make a bigger difference for you.

Same thing with expenses. All else being equal, you can spend $5,000 a month in Chicago or Coeur d'Alene or Honolulu, but there's going to be a big difference in your actual lifestyle in that circumstance. And then finally, with regard to investments, you can optimize your investments. You can do well purchasing mutual funds in your 401(k) and letting them grow over time.

You can also do well buying young cows and putting them out on pasture and selling them when they're fully grown. Those are both very reasonable and valid investments. And one person is far happier out in the country watching his cows, and one person is far happier sitting at a job in New York City.

So it's not that one is right or wrong. It's a matter of which one is right for you and which one is optimal for your specific situation. That is some truly exceptional advice. Thank you so much. So Joshua, you've got your podcast. What? Tell us, how do people connect with you?

They've decided this Joshua guy is my brand of wacky. Sounds like he knows what he's talking about. I want more. How do they get more? Best thing is RadicalPersonalFinance.com or just whatever podcast app you're listening to us on right now. Just search Radical Personal Finance and you will be there.

I've been doing the show for about three and a half years. We are coming up on episode 500. Wow. So there are 500 episodes there and probably average episode length is over an hour. So there are hundreds of hours of shows there. I'm going to take a brief pause on after episode 500 and I'm reworking the show.

One of the things without going into all the backstory, some of my original plans I haven't been able to accomplish in the way that I intended to. And so I'm adjusting what I'm doing to try to solve some of these problems more effectively. But one thing about Radical Personal Finance, pick and choose a few things that are interesting.

I mean, I did a show a couple of weeks ago on lessons from Las Vegas. You know, how can you prepare for being involved in an active shooter scenario? So that's very practical. I've done detailed shows on tax planning, on investment planning, etc. The shows are all different. So it's designed to be cumulative.

There's very little repetition of topics, but that's the best thing. So I would say just go and pick a few things. Use the search box. Search a question out that you're struggling with and see if there's something that's useful. Awesome. Thank you, Joshua, for being on today. I really appreciate it.

It's been really awesome talking to you and I am looking forward to digging into your podcast a little bit more. Thank you for having me, Aaron. Show notes, links to Joshua and other resources from this episode can be found by going to intherabbithole.com/e232. Support the show and get great members only benefits.

A new member even told me ITERH should be charging way more based on what he found once he got into the members area. Visit ITERH.net to learn more. Again, that's ITERH.net. With that, we wrap up episode number 232 from the Lone Star State. Till next time, stay safe and sound.

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